Key indicators to help you evaluate commercial solar investment success

Organizations making a commercial solar investment are often motivated by lower energy bills, tax incentives or other sustainable energy goals. But what is the best way to measure a program’s success in hitting these targets?

A recent article published by Solar Power World notes five key performance indicators (KPIs) that can help organizations evaluate how much value a new solar power system can add to its triple bottom line. Once a commercial solar system is installed, KPIs can also help operators keep their clean power generation running at maximum performance levels.

Return on Investment (ROI):A simple ratio measuring estimated earnings relative to the initial investment. This can be helpful in deciding if a project should proceed or not.

Net Present Value (NPV): This calculation can be used to help evaluate the feasibility of a solar project. NPV estimates a solar project’s future value converted into today’s dollars. The higher the NPV, the more profitable it will likely be.

Internal Rate of Return (IRR):A more detailed form of return on investment, this calculation estimates annual project investment earnings.

Performance Ratio (PR): This calculation is particularly well-suited for solar power generation systems. PR compares the amount of electricity produced versus theoretical estimates. A low PR could indicate technical problems.

Plant Availability (PA): A measure of the amount of time a solar power system is generating electricity. Reasons for downtime could include scheduled maintenance or service interruption. The higher the PA percentage, the better (98% or more is desirable).